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7/27/2019 1. Southwest Study Case Presentation
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Presented by:
NATHANAEL SURYA PRAWIRO
QURRATU AYUN AMRAN
RAMZI RINALDHI
VANIA PRASTICA P
7/27/2019 1. Southwest Study Case Presentation
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Southwest Airlines was the pioneer of low
cost carriers that originated from Love Field,
Dallas Texas at 1974.
What kept it low cost:
Flew a single type aircraft
Flew point
-
to
-
point routes.
One employee is capable of doing multiple
jobs.
What made Southwest interesting is the
rapid reward system.
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Problem 1: Southwest Airlines had a service
system that was not flexible and therefore
did not cater to the needs of its customers
Problem 2: Southwest Airlines did not
periodically change its product/service
development to follow the markets growth
and change.
Problem 3: Southwest Airlines is weak in
maintaining the core competency that it has.
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Certain customers demand preferred service
due to how much money they have contributed
to the company.
If we relate it to the
Service Package
(Chase &
Jacobs, 2011), the services provided by
Southwest did not fulfill two features which are
information
and
implicit services
.
Solution: Southwest could provide an online
service where customers could purchase
independently the services they wish to have at
an additional cost. For example, meals or seat
reservations.
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If we relate it to Design for Customer (Chase &
Jacob, 2011) we can see that Southwest did not
design their services to facilitate their customers.
Their services feels out
-
of
-
date and will not be able
to cope with the ever tightening competitions that is
growing day by day.
This also leads to making their rapid rewards system
less maximized.
Solution: Southwest could implement a mileage
system in which points could be used for tickets or
maybe to get prizes or to upgrade their seating
zones.
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Southwest has a weak long run competency.
There is nothing that makes it stand out from itscompetitors other than the fact that it has cheap
prices.
But as time goes by we can see that even withcheap prices, you can lose your loyal customersif your services is not being improved.
Solution: Southwest must make a periodicsurvey of what the wants of its ever changingconsumers are.
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Conclusion
Southwest Airlines needs to be aware of their loyalconsumers that feels their needs are not beingaddressed to. The event that happened to Liz Bastcould have happened to other customers that felt therules of Southwest is too strict and not flexible.
Even though Southwest is the pioneer of low costcarriers, they can not keep offering the sameservices to their customers each year. Customershave dynamic needs and the advancement ofproducts must be made.
The rapid rewards program is not the appropriatesystem for their consumers in this day and age. Theirconsumers now are looking more for better servicesrather than free flights.
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Southwest needs to think more to the longterm and not only the short term goals. Rapidreward is an example of a short term way toget the markets favor. But in the long run
due to the lack of better service and a weakcore competency, its loyal customers willslowly deplete.
Southwest must make periodic surveysabout its customers and provide additionalservices that are optional to the customersthat are willing to pay extra to get it.
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Lesson Learned
As a company that deals with service, Southwest Airlinesmust include their consumers in making strategies anddecisions. This is because service products deal heavilyon their consumers demands.
Improvements or innovations in services are neededperiodically to fulfill the needs and wants of theirconsumers that are so dynamic to keep up with the everchanging market and to increase their competitiveness.
To know and understand the needs of consumers is reallyimportant. This could help a company increase their
services, make a new product, and to see how the marketviews a certain product, and in return to also see thestrength and weaknesses of another product.
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